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David Lowery says artists are worse off than ever before

From Digital Music News

These are the voices that seem to be getting drowned out. In a talk at SF MusicTech Summit this week, Cracker and Camper van Beethoven founder David Lowery argued that near-zero investment and greediness from companies like Apple are making artists worse off than ever before. The well-articulated argument, dubbed “Meet the New Boss, Worse Than the Old Boss,” was also outlined on Facebook ahead of the talk. Here it is, in Lowery’s words.

“Record labels and artists don’t need to re-invent their business model to match the new reality. THEY ALREADY DID. That’s what we’ve all been doing for the last ten years. AND WE NOW KNOW IT’S ACTUALLY WORSE FOR THE ARTIST.”

“We know this empirically. The facts and evidence are in. Let’s start with the best case scenario. Let’s just look at the division of gross revenues and expenses. The scenario where the artist puts out the record themselves on their own label. Okay, the vast majority of sales take place on iTunes and Amazon. How much does the artist get paid? Well if you are independent, you get 61% of gross, because you need either a distributor or an aggregator to get onto iTunes. iTunes itself keeps more than 30% for simply hosting the songs on their servers. They do absolutely nothing else.

“This is why Steve Jobs was a genius. He was not afraid to be greedy. So now an old-style record deal might have netted the artist 20-35% of gross (most reports of artists deals are wrong and low because they don’t include the mechanical royalties).

“The old deals weren’t great at first glance, but then if you start digging into it they weren’t as bad as people think. And as I will show you were in most cases a better deal for the artists than the new model. 61% of gross is a lot better than 20-35% of gross until you consider the fact that under the new model the artist is responsible for all aspects of the records production, marketing and distribution.

“The artist pays for the recording, the artist pays for all publicity, promotion and advertising. And here is the key thing. The artist absorbs the costs of touring. You know only a handful of artists make a living touring right? Most artists need another job to go back to or they get tour support from the record label.”

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